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I have US$ in CD in a Greek bank. What would happen if the bank folded, or Greece withdrew from the Euro/EU, or if there was a (even more) major financial crisis in Greece?

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  • Are you having issues getting them out?
    – mbhunter
    Commented Sep 24, 2011 at 0:51
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    It's as safe as the bank is. Commented Sep 24, 2011 at 1:02
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    I see two people voted to close on this being too localized. If they're referring to the geographic specificity, remember there are lots of USA-only questions. If they're referring to the temporal specificity, remember that although it may be urgent at the moment, the question of "what happens if my bank folds" can always be asked.
    – poolie
    Commented Sep 24, 2011 at 21:39
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    @sheegaon If that's your beef, you should edit the question appropriately. This question-attorney stuff is maddening. Commented Sep 25, 2011 at 16:51
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    If you are a US citizen or US resident, I hope for your sake you remembered to file the Foreign Bank Account Report, aka TD F 90-22.1 in the USA. irs.gov/pub/irs-pdf/f90221.pdf
    – Paul
    Commented Sep 27, 2011 at 2:03

2 Answers 2

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Greek bank deposits are backed by the Greek government and by the European Central Bank. So in order to lose money under the insurance limits of 100k euros the ECB would need to fail in which case deposit insurance would be the least of most peoples worries.

On the other hand I have no idea how easy or hard it is to get to money from a failed bank in Greece. In the US FDIC insurance will usually have your money available in a couple of days. If there isn't a compelling reason to keep the money in a Greek bank I wouldn't do it.

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  • "Wouldn't do it", meaning you would instead keep the money in USD in a bank outside of Greece? I see your point. Of course there is some hassle to opening a foreign bank account and accounting for it in tax returns, but perhaps George will think the risk-spreading makes it worthwhile.
    – poolie
    Commented Sep 27, 2011 at 9:20
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The risk is that greece defaults on it's debts and the rest of the eurozone chose to punish it by kicking it out of the Eurozone and cutting off it's banks from ECB funds.

Since the greek government and banks are already in pretty dire straits this would leave greece with little choice but to forciblly convert deposits in those banks to a "new drachma". The exchange rate used for the forced conversions would almost certainly be unfavorable compared to market rates soon after the conversion. There would likely be capital controls to prevent people pulling their money out in the runup to the forced conversion. While I guess they could theoretically perform the forced conversion only on Euro deposits this seems politically unlikely to me.

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